Home Insurance - Frequently Asked Questions

Do I need to arrange buildings insurance myself?

If you own a house then yes, your mortgage lender will normally insist on this. A free-holder will usually arrange the buildings insurance if you own a flat. If you rent privately or from the council, the owner arranges the building cover.

If I had a fire I'd just move to another house, so why should I spend more money on 'home rebuilding cost' insurance?

It is extremely unlikely to find a house that is burned to the ground. It is more likely, however that a fire damaged house will have some part of the structure still standing. If it happens to you, the local authority may force you to finance the cost of keeping the structure standing or completely demolishing the structure.

Both ways, this may incur huge costs and if uninsured you could end up paying the full cost of these bills at a time when you'll need every penny to fund the rebuilding of your home or to relocate your family. Home rebuilding insurance will provide cover should these events arise.

How do I work out the 'sum insured' and 'contents insurance'?

Sum insured is the maximum amount you can claim on your policy. It is the cost of rebuilding the entire property and note, not the market value that is usually a greater figure and sometimes a lower figure. If you move house your surveyor should calculate this for you although it is advisable to check it yourself using the table provided by the Association of British Insurers, it's a free leaflet called Buildings Insurance for Homeowners.

Contents Insurance can be calculated using the relevant table suplied by A.B.I.

My friend lives a few miles away from me in a house almost identical to mine. So why are my rebuilding costs much higher than my friend's?

This is a regular source of confusion and these factors have to be carefully thought through:

  • How a structure is built
  • The cost of labour in your area
  • The materials needed for reconstruction

Two houses may look identical on the surface but the above factors may differ completely. To be sure, double check your friend's figures and make sure your rebuilding costs are insured accurately.

Rain has leaked through my roof. Why won't my insurers pay for repairs? They're telling me it's wear and tear.

Your insurance covers you against disasters, natural or otherwise. If you're saying the rain leaking through was the result of a heavy storm, you have good reason to claim. Alternatively, if your roof was getting old and not in good condition as your insurers suggest, they are correct in stating that this is not what your insurance is for.

How do I ensure my 'sum insured' policy is up to date?

Most insurers have a system that automatically updates policies in line with the current inflation rate. There are some regional and other variations. To be safe, check it yourself every 2 years using the free table from ABI, 'Buildings Insurance for Homeowners'.

After a fire damaged my furniture, I wanted cash rather replacement. They agreed but why am I now offered less cash than the replacement cost?

A clause in your policy will state that when dealing with any claim, they can replace, repair or pay for any item. If they choose to replace an item, they negotiate a discount with the supplier. Turning down their replacement offer results in a payment that they would have paid to the supplier, including any discount.

Recently my insurers replaced one of the chairs from my 3-piece suite but know it looks strangely odd. Why won't they give me a full replacement?

This is because the whole suite has not been damaged and your policy will not pay out for undamaged items. Read your policy carefully and see what it says about ' pairs and sets'. If you're still uncertain, call your insurers and ask them to explain their position on 'pairs and sets'.

I live in a subsidence prone area. Can I still get insurance?

The heightened risk of subsidence would mean higher premium and excess payments but yes you can still be insured. Even if subsidence has already affected your property you should still be able to get insurance providing repair work has been successful.

Last week I claimed on my buildings insurance but I am now worried that my premiums will go up. Will they?

Not necessarily, premium rates directly relate to the intensity of claims made and not just by you. Your premium rates are affected by the total amount of claims being made in your entire area.